[pmsb24]

Stockholders equity of STIX company consists of 75,000 shares of $5 par value, 8% cumulative preffered stock and 200,000 shares of $1 par valie common stock. Both classes of stock have been outstanding since the company inception. STIX did not declare any dividends in the prior year, but it now declares and pays a $108,000 cash dividend at the current year-end. Determine the amount distributed to each class of two-year-old company.

[pready]

For the amount distributed to preferred stockholders simply take the outstanding share of 75,000 times the par value times 8% times 2(for 2years of dividends). Now take this number and subtract it from the total dividend and you are left with the amount distributed to common stockholders.